Question: “I am in the military and heard there is a new benefit for military retirees that can help my child with autism. Is this true? If so, what is it?”
The simple answer to your question is YES. For those individuals who have served our country for their career in one of the Armed Services and have retired with a full retirement pension, then the 2014 Defense Authorization Act may help your child quite a bit.
Before this Act was passed, a military retiree could make his/her child with a disability a beneficiary of the military pension. This means that when the military veteran passes away, his/her pension income could be “inherited” by the child with a disability, and that income would continue to be received by the [presumably adult] child for the child’s entire lifetime. On the surface, this benefit seems fantastic; however, the child would begin receiving an income that would then most likely disqualify him/her from receiving government benefit supports, such as Medicaid, housing assistance, supportive employment, and more. This disqualification from government benefits causes most families to steer away from using the pension income benefit, because it would have done more harm than good.
The 2014 Defense Authorization Act now allows a military pension to be “left” at the end of the life of the military veteran to a Special Needs Trust for the benefit of the child with autism (or other disability diagnosis). This change in beneficiary designation for the military pension allows an adult child with a disability to benefit from the parent’s pension income for his/her entire life but yet still qualify for the necessary government benefit supports (as long as the pension income is paid directly to the child’s Special Needs Trust).
It is critical to understand that for military families, this new act provides a great benefit; however, it also means that military families will need to set up two Special Needs Trusts. One Special Needs Trust will be specifically designed to receive the pension income, and the other will be designed slightly differently (but with very important distinctions) to receive any other financial resources that parents or other family members will want to leave to fund the future support needs of the child.
Please consult with a qualified special needs professional to ensure the design of your plan and your trusts are correct so the pension income can be utilized and government benefits will still be available.
For more information on how to prepare for the future, be sure to contact a financial advisor who specializes in serving families with special needs. A Special Needs Plan is driven by what they call Unleash L.I.F.E.™—L.I.F.E. meaning Lasting Independence For Everyone™. This is accomplished with education, action, and support in the creation, implementation, and continued monitoring of a specifically-designed lifelong and integrated plan for your family of parents, caregivers, your loved one with special needs, and their siblings.
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Ryan F. Platt is a registered representative of and offers securities, investment advisory, and financial planning through MML Investors Services, LLC. Member SIPC (www.sipc.org). A Special Needs Plan is not subsidiary or affiliate of MML Investors Services, LLC or it affiliated companies. This article is not a recommendation or endorsement of any products.
This article was featured in Issue 55 – Celebrating with the People We Love